The failures of the Jazzland and Six Flags theme parks have not quelled dreams for another eastern New Orleans complex

The Times-PicayuneJazzland operated for two seasons before filing for bankruptcy.

There was standing room only at St. Maria Goretti Catholic Church in New Orleans last month as a representative from Big League Dreams, a California company vying to develop a sports complex at the shuttered Six Flags amusement park site, presented his vision to residents and local officials.

Interest in that plan as well as one being championed by Southern Star Amusement, a Baton Rouge company that wants to develop a theme park bearing the Nickelodeon brand on the site, has been immense -- and not surprisingly so. The Six Flags site, once heralded as a tourist attraction and catalyst for economic development in eastern New Orleans, has sat untended for four years.

New Orleans residents and public officials alike are eager for something to replace the park.

But interest in redeveloping the site comes as the theme park industry, like other entertainment-related industries, is suffering in the economic downturn. And enthusiastic proponents of the plans have failed to take note of the poor performances that first Jazzland and then Six Flags had at the site.

Those two issues give Dennis Speigel pause.

"It's a very difficult market in which to operate a theme park. I say that based on the history and not just a gut feeling," said Speigel, president of International Theme Park Services, a Cincinnati firm. Speigel, who studied the park as both Jazzland and Six Flags, says he is watching closely this time around, too. "It was an ill-conceived concept in the wrong location and it just should not have been built. It's just one of those things you ought to bury it and let it go."

Proponents of both the theme park and the sports complex, however, tout the potential economic benefits of their plans.

Councilman Arnie Fielkow has said the most exciting thing about the Big League Dreams project is the "indirect economic impact" it would have as a "catalyst that would spur other economic development projects in New Orleans east."

He and Pat Kight, a Big League Dreams executive, have cited the development of several hotels and big-box retailers near the Big League Dreams park in Mansfield, Texas, as evidence of the sports complex's economic development potential.

Similarly, Mayor Ray Nagin described the Southern Star Amusement-Nickelodeon plan as "huge" and suggested that eastern New Orleans residents, specifically, would benefit from its development.

"I don't know if we could have found a better partner. Anyone who owns land in New Orleans east is probably sitting pretty good right now," Nagin said during an August news conference. There was similar optimism before Jazzland Theme Park opened in 2000 after spending 10 years in the planning and financing stages. The park filed for bankruptcy protection two years later.

Jazzland's attendance dropped 40 percent in its second season to 600,000 guests, while that of other regional theme parks climbed. Jazzland had been projected to draw 1 million people a year.

Meanwhile, economic development projects that had been tied to the park, including a Jazzland Hotel and Conference Center, never came to fruition.

"They were predicated on tourists visiting the park. Those people never came to the park," said Speigel, who doesn't think people will travel to New Orleans to spend time at a theme park when they likely have a similar parks closer to home.

Six Flags bought the $135 million Jazzland out of bankruptcy protection for $22 million. Over the course of three seasons before Katrina, the company installed five new rides and used its massive marketing muscle to advertise, but that park also never reached anticipated attendance or revenue numbers.

Six Flags generated $24.5 million in 2003, $18.1 million in 2004 and $15 million in 2005, when the season ended two months early because of Hurricane Katrina.

In its June 2006 proposal to the city asking to get out of its 75-year lease, Six Flags wrote that "the marketplace never embraced the park" even before Katrina flooded it. The storm, the company said, would only exacerbate the park's poor performance.

Today Big League Dreams and Southern Star Amusement are entertaining the idea of trying to succeed in the very same spot where two others have failed. That point will not be lost on potential investors, said George Van Horn, a senior analyst for IBISWorld Inc., a market research firm that studies the amusement park industry.

"This is (an) inherited location and they're trying to make the best out of it," Van Horn said. "Does that mean it's in the best location to make any of these projects work? That's a good question."

Speigel thinks the eastern New Orleans site was always a bad idea.

"To regenerate a theme park on that site is going to be almost impossible. I was never personally sold on that location for the Six Flags theme park and the Jazzland Theme Park," Speigel said. He thinks it would take an initial investment of more than $300 million to operate a successful theme park at the site. "It's on the wrong side of the city. It just doesn't look like that was the way that the growth was going."

The city of New Orleans has a vested interest in seeing the site redeveloped. New Orleans owes $16 million on a $25.3 million loan used to build the park through the U.S. Department of Housing and Urban Development's Section 108 loan program. The first loan for $15 million was taken out in 1995 to build Jazzland, and the second, in 1998, for Six Flags.

The payments on the loan are $2.4 million a year until 2017. The terms of the deal had called for the city to pay $1 million a year toward the debt and for Six Flags to pay $1.4 million. Payments are current. But whether Six Flags has continued paying its share was unclear. Six Flags declined to comment, and city spokeswoman Ceeon Quiett did not respond to a request.

The city refinanced both loans in August to take advantage of lower interest rates, HUD spokesman Brian Sullivan said. The city will go from a fixed interest rate of 6.5 percent to a variable rate of 0.5 percent to 0.6 percent, for a period. That variable rate will eventually set at around 2 percent to 3 percent, Sullivan said. The refinancing could save the city $1.7 million in interest costs over the balance of the loan, Sullivan said.

The current economic climate will make developing any leisure venture at the site a challenge. Attendance at all major national theme parks is down so far this year, including those operated by Disney, Six Flags and Anheuser Busch. That trend is expected to continue, said David Mandt, a spokesman for the International Association of Amusement Parks and Attractions.

"People continue to visit parks, but they may visit parks and attractions closer to home, perhaps now more than ever as they're enduring the stresses of the economy," Mandt said.

Although regional parks have outperformed national ones this year, they still have negative revenue growth, Van Horn said.

To make up for their losses, many amusement parks have slashed ticket prices and extended discount periods to woo customers.

"The penetration rate of people that go to theme parks is so high that one of their questions is where can they get new users to go to the park," Van Horn said. "That is the future challenge of any of the operators. There's no reason to believe that an operator in New Orleans, even if he opens a park and is successful, wouldn't face that."

Should they proceed, the two development concepts now on the table in New Orleans will face more immediate challenges as well.

Big League Dreams' sports complex, for example, would require a $20 million to $25 million investment from the city and perhaps the state and federal governments. Proponents of that project would likely have to prove its economic impact and the potential for their return on investment before money is directed to that project instead of others. Big League Dreams officials have estimated direct and indirect spending tied to the park at $9 million and $29 million, respectively.

Meanwhile, Southern Star Amusement will have to convince the bond market that it's the right time to invest in a theme park even though the credit market is still weak and would-be theme-park investors are leery. With Six Flags in bankruptcy and their investors getting 15 cents on the dollar for their investment, Speigel said he considers the outlook for that project "horrible."

"It's just not a good market to go out and try to sell bonds for a theme park," Speigel said. "It's the worst market in 35 years. It was a tough season this year."

Jaquetta White can be reached at jwhite@timespicayune.com or 504.826.3494.